Rio reserves right to take over Mongolian mine

Rio Tinto
has reserved its right to seek direct ownership of the $US6 billion ($5.6 billion) Oyu Tolgoi copper-gold project in Mongolia after securing majority control of Ivanhoe Mines this week. It could do so either alone or with a third party.

Rio had previously indicated it could seek to bring its largest shareholder, Chinese state-owned group Chinalco, in as a partner for Oyu Tolgoi if the Mongolian government were to agree.

Ivanhoe owns a 66 per cent stake in Oyu Tolgoi. Rio is now managing the project’s development, but the Anglo-Australian miner holds only an indirect interest through its stake in Ivanhoe, with the Mongolian government holding the remaining 34 per cent.

In a filing with the US Securities and Exchange Commission, Rio also said it was undertaking a review of its investment in Ivanhoe after reaching a 51 per cent stake.

Rio said it expected it would replace some of the Canadian miner’s senior management team and at least a majority of the non-Rio appointed directors, which would, in effect, give it more than a majority of the seats on the company’s board.

There is speculation that now that Ivanhoe is under Rio’s control, assets other than Oyu Tolgoi – such as stakes in SouthGobi Resources and
Ivanhoe Australia
– could be sold.